Warby Parker upgraded to Neutral from Sell at Citi

Citi upgraded Warby Parker (WRBY) to Neutral from Sell with a price target of $17, down from $23. With the shares down 41% since February 5, the market has priced in the company’s near-term tariff pressures, the analyst tells investors in a research note. The firm says Warby sells products that are medically necessary and its optical labs are located in the U.S. However, 20% of the company’s frames are sourced from China, and mitigation efforts will likely set the stage for the rest of fiscal 2025, as Warby will need to shift sourcing geographies away from China or increase price to offset the impact from tariffs, contends Citi. The firm says this is likely to cause some near-term margin pressure and volatility in results, which the market now appropriately reflects, resulting in a more balanced risk/reward for the shares.